Cal Poly has been recognized as a leader in sustainability, but one factor taints this title — fossil fuel investment.
The fight against fossil fuel investment is spreading across San Luis Obispo and the California State University (CSU) system, as a group of students are calling for these universities to divest from fossil fuels.
Months after graduating with a major in physics and an environmental studies minor in winter 2020, Cal Poly alumna Lisa Swartz formed “Divest the CSU,” a CSU-wide student-led coalition calling for all CSU campuses to divest its endowments, corporations and other university-affiliated accounts from fossil fuels.
“Fossil fuel use must taper for us to have a livable planet, and it’s not a good investment for your account or for the planet,” Swartz said. “If it’s wrong to be wrecking the climate we all depend on, it’s wrong to be trying to profit from them.”
Divestment is the concept of selling subsidiary investments or assets of an existing company — in this case, Cal Poly and other CSU campuses holding investments in fossil fuel companies.
The Cal Poly Corporation has invested approximately $1.24 million in fossil fuels — about 1% of its investment portfolio, as reported by the San Luis Obispo Tribune.
Additionally, the Cal Poly Foundation has invested approximately $5.6 million — 2.1% of the overall value of the endowment — into the “energy sector,” which encompasses both renewables and fossil fuels, according to university spokesperson Matt Lazier.
Cal Poly values “social and environmental responsibility,” according to its mission statement. Swartz said the university’s current investment in fossil fuels conflicts with this statement.
As of Oct. 6, the CSU committed to not pursue any future fossil fuel investments within the system’s investment portfolios. The CSU Chancellor tasked the CSU Investment Advisory Committee to liquidate some fossil fuel-related bonds, transition out of a direct energy mutual fund and further reduce exposure to fossil fuels.
Despite the CSU system’s commitment to divestment, Cal Poly’s investment portfolio has not changed
The coalition’s goals
Divest the CSU has three main requests: immediately freeze any new investments in fossil fuel companies, divest from the top 100 publicly traded coal and oil and gas companies and reinvest funds to ethical investments within five years, as well as provide accountability for tracking of these goals.
Engineering senior and Divest the CSU co-chair Nicholas Trautman said the team aims at a two-level approach: one level targets the individual campuses, in this case, Cal Poly, and the other level targets the CSU system as a whole, since the two entities hold separate pools of money.
With the recent CSU system divestment, the team now focuses on the legislative hurdle to fully divest the remaining fossil fuel bonds, Trautman said.
The group currently consists of around 10 members, including Cal Poly and other CSU students, along with three co-chairs and a retired faculty member from San Francisco State University who advises the coalition. The organization also participated in this year’s Club Showcase as Fossil Free Cal Poly, environmental management and forestry junior and Divest the CSU co-chair Heath Hooper said.
Last school year, the group drummed up support by sharing their petition, advocating to the Cal Poly community and holding a meeting with Cal Poly President Jeffrey Armstrong, although there was no consensus made, Hooper said.
Over the summer, the three co-chairs and faculty advisor attended lobbying meetings with the CSU West Investment advisory committee members and Board of Trustees members to gauge support and seek advice.
“Now we can hopefully take [the CSU system’s commitment to divest] in another meeting with Cal Poly’s administration,” Hooper said.
Although the team estimates the entire process may take five years, the team set goals following divestment, including reinvestment into renewable energies and having the CSU issue a suggestion to the campuses explaining the logic behind divestment, Hooper said.
According to civil and environmental engineering professor Derek Manheim, there remains a lack of accountability in the fossil fuel industry.
Environmental externalities — such as hydraulic fracking or gas emission leaks from abandoned wells—are not quantified nor factored into the total cost of its environmental impact, he said.
“We could factor that in somehow; whether that’s through carbon taxes or with a cap-and-trade system,” Manheim said. “To stop the subsidies to burn natural gas and other types of fossil fuel resources.”
Greenhouse gas emissions from fossil fuels are a major contributor of global warming. Exceeding 1.5°C of warming above the pre-industrial level by 2030 would expose the planet to the most catastrophic effects of climate change, according to a Special Report from the United Nations Intergovernmental Panel on Climate Change (IPCC).
Some of these effects include extreme heat and heat-related mortality, destructive wildfires and dwindling water resources, according to the report.
Manheim said as California begins to transition to renewable energy resources, Cal Poly should follow suit and be a leader, looking locally and statewide.
“There’s a lot of opportunities around the Central Coast to the wind farm that’s going on [and] PG&E transitioning from nuclear power to something else in the area,” Manheim said.
According to Swartz, besides the environmental aspect of fossil fuel investment, continuing these investments is a poor economic decision.
In the 2020 Energy Outlook for BP, one of the world’s leading oil and gas companies, analysts said that the era of oil demand is over and may not return to pre-pandemic levels.
“It subsequently recovers but never back to pre-COVID[-19] levels,” BP’s Chief Economist Spencer Dale said in a Business Standard article.
Scott Seacrest, a financial advisor with Natural Investments LLC in San Luis Obispo and advisor to the coalition, said people often inaccurately differentiate between environmental and economic interests.
“Our economic system is based on the environment we live in,” he said. “To think that they’re separate and one can be healthy and one cannot is [inaccurate].”
Seacrest said that the physical process of acquiring fossil fuels has become outdated and unreasonable.
“We have to go find [fossil fuels] around the world and appraise it in these inhospitable areas,” he said. “Get it out of the ground, transport it to all the gas stations and then burn it.”
According to Fossil Free, a project of 350.org, more than 100 educational institutions across the country and globe have committed to partially or fully divest their holdings of fossil fuel stock from their endowments.
In May 2020, the UC system fully divested from fossil fuels and has invested over one billion dollars in clean energy projects. In February, the University of Southern California froze new investments in fossil fuels and plan to sell current fossil fuel investments over the next several years.
Effects of Divestment
Environmental management and protection senior Hope Springer said she hopes Divest the CSU sheds light on the power of the dollar. She wants Cal Poly faculty and staff to become more aware of their investments to counter complacency.
From this movement, Springer thinks Cal Poly can align more with its goal of being a progressive university.
“Cal Poly obviously has had many [diversity] issues, and maybe they could improve themselves by doing something for sustainability,” she said.
After seeing universities, churches, governments, even the city of San Luis Obispo choosing to divest from fossil fuels, it begs the question, “Why?” Trautman said.
The public perception around the fossil fuel industry and its role in society needs to change, he said.
“Divestment is a great way [to] use our voice as students and leverage our power as students to make our concerns [for the future known]—that if we continue on the route that we have been on, the future is grim indeed,” Trautman said.